WASHINGTON — The Internal Revenue Service today encouraged taxpayers who missed the April tax-filing deadline to file a tax return as soon as they can.

The IRS offers different resources to help those who may be unable to pay their tax bill in total. Those who missed the deadline to file but owe taxes should file quickly to minimize penalties and interest.

Taxpayers should keep in mind that payments are still due by the April 15 deadline, even if they requested an extension of time to file a tax return. An extension to file is not an extension to pay.

File and pay amount owed to reduce penalties and interest

Taxpayers who still owe taxes should file their tax return and pay any taxes owed quickly to reduce penalties and interest. Until the balance is paid in full, interest and penalties accrue on taxes owed.

Even if a taxpayer can't afford to immediately pay the full amount of taxes owed, they should still file a tax return and pay as much as possible. This reduces interest and penalties on the outstanding amount and may help avoid a possible late-filing penalty.

There are options for taxpayers who owe the IRS but cannot afford to pay. For more information see the penalties page on IRS.gov.

Taxpayers may qualify for penalty relief if they have filed and paid timely for the past three years and meet other important requirements, including paying or arranging to pay any tax due. For more information, see the first-time penalty abatement page on IRS.gov.

Electronically pay taxes owed

A quick, easy way for individuals to pay taxes owed securely is through IRS Direct Pay, debit or credit card or digital wallet, or their IRS Online Account. Taxpayers may also apply online for a payment plan (including an installment agreement).

Those who pay electronically get immediate confirmation after submitting payment. The Electronic Federal Tax Payment System (EFTPS) and Direct Pay allow taxpayers to receive payment email notifications. Find more payment options on IRS.gov/payments.

Some taxpayers automatically qualify for extra time to file and pay taxes due without penalties and interest, including:

• Taxpayers in certain disaster areas. There’s no need for these taxpayers to submit an extension; extra time is granted automatically due to the disaster. Information on the most recent tax relief for disaster situations is available on the IRS website. 
• U.S. citizens and resident aliens who live and work outside of the United States and Puerto Rico get an automatic two-month extension to file their tax returns. This year they have until June 17 to file. However, tax payments are still due April 15 or interest will be charged.
• Members of the military on duty outside the United States and Puerto Rico. Details are available in Publication 3, Armed Forces’ Tax Guide.
• Those serving in combat zones have up to 180 days after they leave the combat zone to file returns and pay any taxes due.

Owed a refund? Don’t overlook filing a tax return; 2020 unclaimed refund deadline May 17

Taxpayers who choose not to file a return because they don't earn enough to meet the filing requirement may miss out on receiving a refund due to potential refundable tax credits. Some examples are the Earned Income Tax Credit and Child Tax Credit. Taxpayers sometimes fail to file a tax return and claim a refund for these credits and others for which they may be eligible.

There's no penalty for filing after the April 15 deadline if a refund is due. However, taxpayers due a refund should still consider filing as soon as possible. Every year, the IRS estimates that there are nearly a million taxpayers potentially due refund money who failed to file prior year tax returns.

For taxpayers who didn’t file a 2020 tax return, time is running out to claim those refunds. The deadline to file 2020 returns is May 17, 2024.

Taxpayers still needing to file for tax year 2023 are encouraged to use electronic filing options including IRS Free File, which is available on IRS.gov through Oct. 20 to prepare and file 2023 tax returns electronically.

Taxpayers can track their refund using the “Where's My Refund?” tool on IRS.gov, IRS2Go or by calling the automated refund hotline at 800-829-1954. To use the tool, taxpayers need the primary Social Security number on the tax return, the filing status and the expected refund amount. The refund status information updates once daily, usually overnight, so there's no need to check more frequently.

Selecting a trusted tax professional

Taxpayers who still need to file a return may wish to consult a tax preparer. The IRS has resources to help taxpayers choose a tax professional. Tools like the Directory of Federal Tax Return Preparers with Credentials and Select Qualifications allows taxpayers to find tax return preparers who have completed IRS requirements for the Annual Filing Season Program or who hold a professional credential recognized by the IRS.

Taxpayer Bill of Rights

Taxpayers have fundamental rights under the law that protect them when interacting with the IRS. The Taxpayer Bill of Rights divides them in 10 categories. IRS Publication 1, Your Rights as a Taxpayer, reiterates these rights along with the agency's obligation to protect them.

IRS offers several payment options, including help for those struggling to pay

Taxpayers have a variety of options to consider when paying federal taxes. Electronic payment options are the best way to make a tax payment.

For taxpayers who cannot pay in full, the IRS encourages them to pay what they can and explore a variety of payment options available for the remaining balance, including getting a loan to pay the amount due. In many cases, loan costs may be lower than the combination of interest and penalties the IRS must charge by law.

The IRS also urges taxpayers not to wait to respond to a notice. Notices and letters provide taxpayers with information about the actions they need to take. Many notices have QR codes that help direct taxpayers to their online tax accounts. In addition, these letters inform the taxpayer of the status of their unpaid balance, options for resolution and their rights in the collection process.

For taxpayers who can't pay their tax bill in full, the IRS offers several options to help them meet their obligations. IRS payment options are available at IRS.gov/payments.

Options for paying electronically

• Direct Pay – Individual taxpayers can use Direct Pay for up to two payments each day. Direct Pay lets taxpayers pay online directly from a checking or savings account for free and schedule payments up to 365 days in advance. They'll receive an email confirmation of their payments.
• Electronic Federal Tax Payment System (EFTPS) – The best payment option for individual taxpayers or businesses making large payments is the EFTPS, which allows up to five payments per day. The system requires enrollment. Taxpayers can schedule payments up to 365 days in advance and opt in to receive email notifications about their payments.
• Electronic funds withdrawal – Individual taxpayers and businesses can pay when they file electronically using tax software online. If they're using a tax preparer, they can ask the preparer to make the tax payment through an electronic funds withdrawal from a bank account.
• Payment processor – Individual taxpayers and businesses can choose to pay with a credit card, debit card or digital wallet through a payment processor. Although processing fees apply, no part of those go to the IRS.
• IRS Online Account – Individual taxpayers have the option to create and sign into an IRS Online Account to pay from there. Online Account allows taxpayers to view:
• • The amount they owe.
  • Payment history and any scheduled or pending payments.
  • Payment plan details.
  • Digital copies of select notices from the IRS.

Paying by check, money order or cashier's check

If they’re paying an income tax liability that's currently due without an accompanying income tax return, taxpayers paying by check, money order or cashier's check should include Form 1040-V, Payment Voucher, with the payment.

• Mail the payment to the correct address by state or form. Don't send cash through the mail. Indicate on the check memo line the specific tax year to which the IRS should apply the payment.
• Those paying when filing their current year's income tax return shouldn't staple or paperclip the payment to the return. For more information go to Pay by Check or Money Order on IRS.gov.

Paying by cash

Individuals and businesses preferring to pay in cash can do so at a participating retail store. There's a $500 limit per payment, and processing fees apply.

Other options

Most taxpayers also have the following payment options if they can't pay in full now:

• Payment plans –Taxpayers who owe but can’t pay in full don’t have to wait for a tax bill to set up a payment plan (or installment agreement) to pay off an outstanding balance over time. Most taxpayers qualify and can set up a payment plan through the Online Payment Agreement (OPA) tool, as well as using IRS text or voice bots. Once taxpayers complete the online application, they receive immediate notification of whether the IRS has approved their payment plan. Taxpayers can set up a plan using OPA in minutes. There's no paperwork and no need to call, write or visit the IRS. Setup fees may apply for some types of plans. 
• Offer in Compromise – An Offer in Compromise allows qualifying taxpayers to settle their tax liabilities for less than the total amount they owe. To help determine their eligibility, they can use the Offer in Compromise Pre-Qualifier tool.
• Temporarily Delaying Collection – Taxpayers can contact the IRS to request a temporary delay of the collection process. If the IRS determines a taxpayer is unable to pay, it may delay collection until the taxpayer's financial condition improves. Penalties and interest continue to accrue until the taxpayer pays the full amount.

Inside This Issue

1. IRS delivers a strong filing season; work continues
2. Virtual information session on BOI reporting requirements April 30
3. IRS seeks IRSAC membership nominations; new subcommittee created on Fairness in Tax Administration
4. Continuing education at the IRS Nationwide Tax Forum
5. IRS issues 2023 Data Book
6. IRS to update Allowable Living Expense standards for 2024
7. Updated FAQs for clean vehicle, energy efficient home improvement and residential clean energy property credits
8. Upcoming webinars for tax practitioners
9. News from the Justice Department’s Tax Division
10. Technical Guidance

1.  IRS delivers a strong filing season; work continues

With the filing season deadline earlier this week, the IRS emphasized a number of enhancements that dramatically expanded service for taxpayers during the 2024 filing season. Through Inflation Reduction Act funding, the IRS increased taxpayer service levels not seen in more than a decade. Compared to a year ago, the IRS answered more than 1 million more taxpayer phone calls this tax season, helped more than 170,000 people in-person and saw 75 million more IRS.gov visits fueled by a new and expanded Where’s My Refund? tool. “With the help of more funding and added resources, service for taxpayers this filing season eclipsed levels seen during the past decade,” said IRS Commissioner Danny Werfel.

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2.  Virtual information session on BOI reporting requirements April 30

A new law requires many companies doing business in the United States to report information to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) about who ultimately owns or controls them. Join a FinCEN representative on April 30 at 2 p.m. ET for a virtual information session on beneficial ownership information reporting requirements and how to comply with the law. Learn more about beneficial ownership information reporting at https://www.fincen.gov/boi.

Companies created or registered in early 2024 may have an approaching deadline for a new federal government filing requirement. The Corporate Transparency Act, a bipartisan law that was passed to combat and stop illicit finance, requires many companies doing business in the United States to report information to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) about who ultimately owns or controls them.

Federal regulations require certain companies (“reporting companies”) to file their initial reports by the following deadlines:

• Existing companies: Reporting companies created or registered to do business in the United States before Jan. 1, 2024, must file by Jan. 1, 2025.
• Newly created or registered companies: Reporting companies created or registered to do business in the United States in 2024 have 90 calendar days to file after receiving actual or public notice that their company’s creation or registration is effective.

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3.  IRS seeks IRSAC membership nominations; new subcommittee created on Fairness in Tax Administration

The IRS is accepting applications for the 2025 Internal Revenue Service Advisory Council (IRSAC), including nominees for a new subcommittee centered on fairness issues. The new IRSAC Subcommittee on Fairness in Tax Administration will review and issue specific recommendations related to fairness in tax administration for low-income communities, communities of color and other historically underserved populations. Deadline to submit your application is May 31. The IRSAC serves as an advisory body to the IRS commissioner and agency leadership. The group is organized under the Federal Advisory Committee Act and includes volunteer members with a diverse set of interests in tax issues. Qualified individuals who are selected will serve three-year terms on the IRSAC beginning January 2025.

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4.  Continuing education at the IRS Nationwide Tax Forum

Tax pros: The IRS Nationwide Tax Forum provides continuing education (CE) credits for enrolled agents, certified public accountants, Annual Filing Season Program participants and California Tax Education Council (CTEC) participants. Tax professionals can earn up to 19 credits at the three-day forum, which is coming this summer to Chicago, Orlando, Baltimore, Dallas and San Diego.

The IRS Nationwide Tax Forum is an IRS-approved CE provider for enrolled agents, as well as those participating in the Annual Filing Season Program. For more information on requirements, visit www.irs.gov/Tax-Professionals/Annual-Filing-Season-Program.

The Tax Forum is also registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. For more information, visit the IRS Nationwide Tax Forum: Continuing Education (CE).

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5.  IRS issues 2023 Data Book

The IRS this week released its 2023 Data Book outlining the agency’s activities during fiscal year 2023, which includes collected revenue and tax returns processed. The 2023 Data Book reflects the initial impacts of the historic long-term funding provided under the Inflation Reduction Act (IRA) of 2022 to transform the IRS and modernize how the agency serves the American people.

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6.  IRS to update Allowable Living Expense standards for 2024

Allowable Living Expense (ALE) standards for 2024 will be available April 22. The ALE standards reduce subjectivity when determining what a taxpayer may claim as basic living expenses to avoid undue hardship when the taxpayer must delay full payment of a delinquent tax. The standard allowances provide consistency and fairness in collection determinations by incorporating average expenditures for necessities for citizens in similar geographic areas.

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7.  Updated FAQs for clean vehicle, energy efficient home improvement and residential clean energy property credits

The IRS revised frequently asked questions (FAQ) to provide guidance related to the New, Previously Owned and Qualified Commercial Clean Vehicle Credits. These FAQ revisions include updates to the eligibility rules for the Clean Vehicle Credit; income and price limitations for the new Clean Vehicle Credit; and transfer of the new Clean Vehicle Credit and the Previously Owned Clean Vehicle Credit. The agency also updated FAQs to address the federal income tax treatment of amounts paid for the purchase of energy efficient property and improvements. 

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8.  Upcoming webinars for tax practitioners

The IRS offers the upcoming live webinar to the tax practitioner community. For more information or to register, visit the Webinars for Tax Practitioners webpage:

• Tax Implications of Chapter 11 Bankruptcy Filing for Individuals on May 1, at 1 p.m. ET. Earn up to 2 CE credits (Federal Tax). Certificates of completion are being offered.

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9.  News from the Justice Department’s Tax Division

Jonathan Barefoot, a Mississippi tax return preparer, was sentenced to 30 months in prison for preparing false tax returns. Barefoot and co-conspirators prepared thousands of fraudulent returns, causing more than $3.5 million in tax loss to the IRS. In addition to the term of imprisonment, Barefoot was ordered to serve one year of supervised release. IRS Criminal Investigation investigated the case.

Gary Sandiego, an Illinois tax preparation business owner, pleaded guilty to preparing false tax returns. The complaint alleges Sandiego exaggerated or fabricated expenses to deceitfully claim on the returns Residential Energy Credits and employment-related expense deductions. As a result, Sandiego caused a tax loss to the IRS of approximately $4.58 million. Sandiego faces a maximum penalty of three years in prison for each count and a period of supervised release, restitution and monetary penalties. IRS Criminal Investigation is investigating the case.

Bryon Taylor, an Illinois tax preparation business owner, is accused of 21 counts of tax return fraud. For tax years 2017 through 2020, Taylor allegedly prepared returns for clients that contained false information resulting in the clients claiming refunds to which they were not entitled. Taylor faces a maximum penalty of three years in prison for each count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. IRS Criminal Investigation is investigating the case.

Awett Tedla, a former Washington, D.C. area tax return preparation business owner and now of Indianapolis, was sentenced to 21 months in prison for conspiring to file false tax returns, wire fraud and tax evasion. The complaint alleges that from 2012 through 2016, Tedla and co-conspirators prepared fraudulent returns for clients that reported fictitious businesses and claimed certain tax credits, including the Earned Income Tax Credit, to generate inflated tax refunds. Tedla’s conduct caused a tax loss to the IRS of approximately $171,534. In addition to the term of imprisonment, Tedla was ordered to serve three years of supervised release and to pay restitution to the United States. IRS Criminal Investigation and the Treasury Inspector General for Tax Administration investigated the case.

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10. Technical Guidance

Notice 2024-33 provides limited relief to CAMT taxpayers from the addition to tax under section 6655 of the Internal Revenue Code] for failure to pay estimated income tax with respect to its CAMT liability under section 55 of the Code for the 2024 first quarterly installment of estimated income tax due on or before April 15, 2024 (or on or before May 15, 2024, for taxpayers with taxable years beginning in February 2024).

Notice 2024-35 provides relief with respect to certain required minimum distributions (RMDs) that are not made in 2024.

Revenue Procedure 2024-20 provides the domestic asset/liability percentages and domestic investment yields needed by foreign life insurance companies and foreign property and liability insurance companies to compute their minimum effectively connected net investment income under section 842(b) of the Internal Revenue Code for taxable years beginning after December 31, 2022. This revenue procedure applies to foreign insurance companies.

Revenue Procedure 2024-21 provides issuers of qualified mortgage bonds and mortgage credit certificates with (1) the nationwide average purchase price for residences located in the United States, and (2) the average area purchase price safe harbors for residences located in statistical areas in each state, the District of Columbia, Puerto Rico, the Northern Mariana Islands, American Samoa, the Virgin Islands and Guam.

Revenue Ruling 2024-09 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate and the adjusted federal long-term tax-exempt 

Revenue Procedure 2024-21 provides issuers of qualified mortgage bonds and mortgage credit certificates with (1) the nationwide average purchase price for residences located in the United States, and (2) the average area purchase price safe harbors for residences located in statistical areas in each state, the District of Columbia, Puerto Rico, the Northern Mariana Islands, American Samoa, the Virgin Islands, and Guam.

 

Revenue Procedure 2024-21 will be in IRB 2024-19, dated May 6, 2024.

WASHINGTON — The Internal Revenue Service today updated frequently asked questions in Fact Sheet 2024-14 to provide guidance related to the New, Previously Owned and Qualified Commercial Clean Vehicle Credits.

These FAQs supersede earlier FAQs that were posted in Fact Sheet 2023-29 on Dec. 26, 2023.

The FAQs revisions are as follows:

·         Topic A: Eligibility Rules for the New Clean Vehicle Credit: Revised Question 10.

·         Topic B: Income and Price Limitations for the New Clean Vehicle Credit: Revised Question 11.

·         Topic H: Transfer of New Clean Vehicle Credit and Previously Owned Clean Vehicle Credit: Revised Questions 5 and 15.

More information about reliance is available.

Notice 2024-35 provides relief with respect to certain required minimum distributions (RMDs) that are not made in 2024. This relief was provided with respect to certain RMDs in 2021, 2022, and 2023, and is being extended in this notice to certain RMDs in 2024. Specifically, the notice provides that if certain requirements are met, a plan will not fail to be qualified for failing to make a specified RMD in 2024, and a taxpayer will not be assessed an excise tax for failing to take the RMD. This notice also announces that the final regulations intended to be published relating to RMDs are anticipated to apply for purposes of determining RMDs for calendar years beginning on or after January 1, 2025. 

Notice 2024-35 will be in IRB: 2024-19, dated May 6, 2024.

WASHINGTON The IRS encourages taxpayers to use the IRS Tax Withholding Estimator to ensure they’re withholding the correct amount of tax from their pay in 2024. 

This digital toolprovides workers, self-employed individuals and retirees with wage income a user-friendly resource to effectively adjust the amount of income tax withheld from their wages. 

The Tax Withholding Estimator will help taxpayers avoid unwanted results in 2024 if the refund for their 2023 return was too large, too small or if they received a surprise tax amount due. 

Benefits of using the Estimator

For employed individuals, withholding refers to the federal income tax amount deducted from their paycheck. Taxpayers can use the Tax Withholding Estimator's findings to decide whether they should fill out a new Form W-4 and give it to their employer. This process can, for instance: 

• Ensure the correct tax amount is withheld, preventing a surprise tax bill or penalty during tax season, and
• Decide whether to reduce upfront tax withholding, increasing take-home pay and potentially reducing any tax refund at the end of the tax year. 

When should taxpayers use this tool?

The IRS suggests taxpayers review their withholding at least once annually. For anyone who’s recently completed their 2023 return, now is an ideal time to do so. It's also wise to use this tool after significant life events like marriage, divorce, buying a home or having a child. 

When using the withholding calculator taxpayers should consider all forms of income, including part-time work, side jobs or the sale of goods or services commonly reported on Form 1099-K.

What records are needed?

The Tax Withholding Estimator’s results are only as accurate as the information entered. To help prepare, the IRS recommends taxpayers gather: 

• Their most recent pay statements, and if married, for their spouse,
• Information for other sources of income, and
• Their most recent income tax return in 2023, if possible. 

While the Tax Withholding Estimator works for most taxpayers, people with more complex tax situations should instead use the instructions in Publication 505, Tax Withholding and Estimated Tax. This includes taxpayers who owe alternative minimum tax or certain other taxes, and people with long-term capital gains or qualified dividends. 

Additional information

Tax Withholding Estimator FAQs

Paycheck Checkup

WASHINGTON — The Internal Revenue Service today updated frequently asked questions in Fact Sheet 2024-15 to addresses the federal income tax treatment of amounts paid for the purchase of energy efficient property and improvements. 

 

These FAQs supersede earlier FAQs that were posted in Fact Sheet 2022-40, on Dec. 22, 2022. 

 

The FAQs revisions are as follows: 

• General questions— Question 4 

On April 5, 2024, the Internal Revenue Service issued Announcement 2024-19 that addressed the federal income tax treatment of amounts paid for the purchase of energy efficient property and improvements. 

 

Generally, taxpayers who receive rebates for the purchase of energy efficient homes will not include the value of those rebates as income on their tax returns, however they will need to reduce the basis of the property when they sell it by the amount of the rebate.

 

The Inflation Reduction Act (IRA) statutory language describes performance-based incentives and electrification product subsidies as “rebates.” 

 

Announcement 2024-19 provides that amounts received from the Department of Energy (DOE) home energy rebate programs funded through the IRA will be treated as a reduction in the purchase price or cost of property for eligible upgrades and projects.  Accordingly, the consumer that receives an IRA rebate will not be required to report the value of the rebate as income.

 

More information about reliance is available.

WASHINGTON –The Internal Revenue Service today issued frequently asked questions (FAQs) in Fact Sheet 2024-13 related to the tax treatment of work-life referral services provided to employees under an employer’s work-life referral program. 

A work-life referral program is an employer-funded fringe benefit that provides work-life referral services to eligible employees. 

Work-life referral services are restricted to informational and referral consultations that assist employees with identifying, contacting and negotiating with life-management resources for solutions to a personal, work or family challenge.  For example, choosing a suitable child or dependent care program, connecting with a local retirement or financial planner or navigating eligibility for government benefits.   

The FAQs released today clarify that, under certain circumstances, the value of work-life referral services provided to employees through a work-life referral program can be excluded from income and employment taxes as de minimis fringe benefits.

Revenue Ruling 2024-09 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, and the adjusted federal long-term tax-exempt rate. These rates are determined as prescribed by § 1274. 

The rates are published monthly for purposes of sections 42, 382, 412, 642, 1288, 1274, 7520, 7872, and various other sections of the Internal Revenue Code.

Revenue Ruling 2024-09 will be in IRB:  2024-19, dated May 6, 2024.